CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION June 30, 2016 and 2015 CONTENTS INDEPENDENT AUDITORS' REPORT FINANCIAL STATEMENTS Combined Statements of Financial Position Combined Statements of Activities and Changes in Net Assets Combined Statements of Functional Expenses Combined Statements of Cash Flows Notes to Combined Financial Statements 1 2-3 4-7 8 9-15 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 16-17 SUPPLEMENTARY INFORMATION FOR THE CITY OF PHILADELPHIA DEPARTMENT OF BEHAVIORAL HEALTH AND INTELLECTUAL DISABILITY SERVICES, OFFICE OF ADDICTION SERVICES Schedule of Functional Expenditures by Program and Revenue by Funding Sources 18-19 DEPARTMENT OF HUMAN SERVICES Report of Revenue by Functional Program 20 Report of Functional Expenditures 21 Report of Excess Revenue 22 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIED INDIRECT COST ALLOCATION REQUIREMENTS 23-24
100 Witmer Road, Suite 350, Horsham, PA 19044-2369 215-441-4600 n fax: 215-672-8224 n www.kmco.com Audit & Accounting Tax Strategies Business Advisory Technology Solutions Human Capital Resources Member of The Leading Edge Alliance
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the organization's preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of CORA Services, Inc. and The CORA Services Foundation as of June 30, 2016 and 2015, and the combined changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matter Our audits were conducted for the purpose of forming an opinion on the combined financial statements as a whole. The accompanying supplementary information on pages 18 through 22 is presented for purposes of additional analysis as required by the Department of Public Health in the City of Philadelphia and the City of Philadelphia Subrecipient Audit Guide and is not a required part of the combined financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combined financial statements. The information has been subjected to the auditing procedures applied in the audits of the combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combined financial statements or to the combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the combined financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 20, 2016 on our consideration of CORA Services, Inc. and The CORA Services Foundation's internal control over financial reporting and on our tests of their compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering CORA Services, Inc. and The CORA Services Foundation's internal control over financial reporting and compliance. Horsham, Pennsylvania October 20, 2016
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Combined Statements of Financial Position June 30, 2016 and 2015 2016 2015 ASSETS Current assets: Cash and cash equivalents $ 435,274 $ 233,177 Grants and contracts receivable, net of allowance of $61,781 and $18,441in2016 and 2015, respectively 3,136,433 2,627,084 Prepaid expenses 16,630 30,534 Total current assets 3,588,337 2,890,795 Property and equipment, net 6,676,007 6,916,992 $ 10,264,344 $ 9,807,787 LIABILITIES AND NET ASSETS Current liabilities: Line of credit $ $ 155,297 Current portion of long-term debt 168,370 163,057 Accounts payable and accrued expenses 656,296 657,287 Accrued wages and compensated absences 2,007,099 1,494,134 Deferred revenue 153,349 150,129 Total current liabilities 2,985,114 2,619,904 Long-term debt, net of current portion 1,361,075 1,528,011 Total liabilities 4,346,189 4,147,915 Net assets: Unrestricted 5,865,067 5,559,337 Temporarily restricted 53,088 100,535 See accompanying notes to combined financial statements. 5,918,155 5,659,872 $ 10,264,344 $ 9,807,787-1-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Combined Statements of Activities and Changes in Net Assets Years Ended June 30, 2016 and 2015 Unrestricted Revenue: Grants and contracts $ 16,373,339 Fees and services 1,377,420 Contributions and fundraising 182,471 Special events, net of expenses of $62,089 and $33,828 in 2016 and 2015, respectively 101,213 Interest income 94 Rental income 98,140 Net assets released from restrictions 103,492 18,236,169 Expenses: Program services: Auxiliary services to nonpublic schools 7,084,246 Counseling and prevention/ intervention 2,032,738 Charter and other school services 4,132,876 Early childhood services 1,725,239 After school programs 351,193 15,326,292 Supporting services: Management and general 1,647,037 Building maintenance and occupancy 770,339 Promotional and fundraising 186,771 17,930,439 Change in net assets 305,730 Net assets at beginning of year 5,559,337 Net assets at end of year $ 5,865,067 2016 Temporarily Restricted $ 56,045 (103,492) (47,447) (47,447) 100,535 $ 53,088 Total $ 16,373,339 1,377,420 238,516 101,213 94 98,140 18,188,722 7,084,246 2,032,738 4,132,876 1,725,239 351,193 15,326,292 1,647,037 770,339 186,771 17,930,439 258,283 5,659,872 $ 5,918,155 See accompanying notes to combined financial statements. -2-
2015 Temporarily Unrestricted Restricted Total $ 12,378,765 $ $ 12,378,765 1,227,037 1,227,037 184,378 45,000 229,378 65,716 65,716 260 260 49,800 49,800 54,403 (54,403) 13,960,359 (9,403) 13,950,956 4,911,642 4,911,642 1,725,912 1,725,912 2,877,523 2,877,523 1,555,120 1,555,120 399,966 399,966 11,470,163 11,470,163 1,576,270 1,576,270 753,004 753,004 116,533 116,533 13,915,970 13,915,970 44,389 (9,403) 34,986 5,514,948 109,938 5,624,886 $ 5,559,337 $ 100,535 $ 5,659,872-3-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Combined Statement of Functional Expenses Year Ended June 30, 2016 Program Services Auxiliary Counseling Services to and Charter and Early After Nonpublic Prevention/ Other School Childhood School Schools Intervention Services Services Programs Salaries $ 5,054,497 $ 1,530,632 $ 2,693,398 $ 1,286,533 $ 260,624 Payroll taxes and fringe benefits 1,363,897 396,086 534,180 321,987 47,535 Total employee compensation 6,418,394 1,926,718 3,227,578 1,608,520 308,159 Consultants and professional fees 82,099 5,262 824,802 12,354 733 Occupancy 108,743 26,812 4,000 Supplies and other program related expenses 341,754 19,619 25,901 44,129 28,613 Equipment, rental, maintenance and repair 44,060 34,414 2,155 10,764 4,371 Automobile and travel 33,689 33,259 13,412 4,808 4,024 Insurance Donations Advertising 625 Telephone 47,181 11,463 5,806 10,397 1,293 Interest Bad debt expense 33,222 657,526 104,017 905,298 109,889 43,034 Depreciation 8,326 2,003 6,830 665,852 106,020 905,298 116,719 43,034 Total expenses $ 7,084,246 $ 2,032,738 $ 4,132,876 $ 1,725,239 $ 351,193-4-
Supporting Services Building Management Maintenance Promotional and and and General Occupancy Fundraising Total $ 926,523 $ 145,595 $ 32,047 $ 11,929,849 242,586 45,137 5,307 2,956,715 1,169,109 190,732 37,354 14,886,564 232,181 921 102,984 1,261,336 186,610 326,165 56,457 284 38,743 555,500 38,920 31,022 165,706 3,345 2,804 144 95,485 79,502 33,910 113,412 2,500 6,000 8,500 7,259 1,381 9,265 6,319 24,763 165 107,387 41,445 62,042 103,487 10,000 43,222 477,928 342,356 149,417 2,789,465 237,251 254,410 477,928 579,607 149,417 3,043,875 $ 1,647,037 $ 770,339 $ 186,771 $ 17,930,439-5-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Combined Statement of Functional Expenses Year Ended June 30, 2015 Program Services Auxiliary Counseling Services to and Charter and Early After Nonpublic Prevention/ Other School Childhood School Schools Intervention Services Services Programs Salaries $ 3,319,986 $ 1,283,295 $ 1,786,374 $ 1,127,207 $ 286,203 Payroll taxes and fringe benefits 991,257 308,496 330,406 313,025 52,440 Total employee compensation 4,311,243 1,591,791 2,116,780 1,440,232 338,643 Consultants and professional fees 184,975 13,126 726,565 5,760 Occupancy 12,628 39,661 12,000 Supplies and other program related expenses 289,417 55,255 16,375 34,405 38,097 Equipment, rental, maintenance and repair 59,496 25,685 2,268 7,083 1,609 Automobile and travel 28,061 27,547 9,598 7,840 8,406 Insurance Donations Advertising Telephone 25,822 6,896 5,937 10,965 1,211 Interest Bad debt expense 600,399 128,509 760,743 105,714 61,323 Depreciation 5,612 9,174 600,399 134,121 760,743 114,888 61,323 Total expenses $ 4,911,642 $ 1,725,912 $ 2,877,523 $ 1,555,120 $ 399,966-6-
Supporting Services Building Management Maintenance Promotional and and and General Occupancy Fundraising Total $ 957,173 $ 134,934 $ $ 8,895,172 210,460 34,772 2,240,856 1,167,633 169,706 11,136,028 173,765 1,260 98,367 1,203,818 189,238 253,527 61,213 2,955 12,135 509,852 58,601 29,557 184,299 5,091 2,904 31 89,478 72,077 31,940 104,017 6,000 6,000 11,032 11,032 9,542 22,907 83,280 12,316 67,247 79,563 5,000 5,000 408,637 348,008 116,533 2,529,866 235,290 250,076 408,637 583,298 116,533 2,779,942 $ 1,576,270 $ 753,004 $ 116,533 $ 13,915,970-7-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Combined Statements of Cash Flows Years Ended June 30, 2016 and 2015 Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Depreciation Increase in allowance for doubtful accounts (Increase) decrease in assets: Grants and contracts receivable Prepaid expenses Increase (decrease) in liabilities: Accounts payable and accrued expenses Accrued wages and compensated absences Deferred revenue Net cash provided by (used in) operating activities Cash flows from investing activity: Purchase of property and equipment Cash flows from financing activities: Borrowings (repayments) on the line of credit, net Repayments of long-term debt Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Supplemental disclosure of cash flow information: Cash paid during the year for interest 2016 $ 258,283 254,410 43,340 (552,689) 13,904 (991) 512,965 3,220 532,442 (13,425) (155,297) (161,623) (316,920) 202,097 233,177 $ 435,274 $ 94,046 2015 $ 34,986 250,076 8,170 (671,283) (13,532) 167,194 142,098 76,954 (5,337) (224,400) 155,297 (156,474) (1,177) (230,914) 464,091 $ 233,177 $ 77,500 See accompanying notes to combined financial statements. -8-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Notes to Combined Financial Statements June 30, 2016 and 2015 (1) Organization CORA Services, Inc. (CORA) is a not-for-profit human services agency which provides counseling and educational programs to children and their families in the Greater Philadelphia community primarily through contracts with various governmental agencies, school districts, and other not-for-profit organizations. CORA serves over 16,000 children each year in over 180 non-public, public, and charter school systems, as well as in multiple community locations. CORA is affiliated with The CORA Services Foundation (the Foundation) through common management and Board of Directors' membership. The Foundation supports the stated purposes of CORA Services, Inc. The Foundation's Board of Directors has the authority to make contributions to other not-for-profit organizations that provide services similar to CORA in the community. (2) Summary of Significant Accounting Policies Principles of Combination The combined financial statements include the accounts of CORA and the Foundation, which are affiliated organizations (collectively, the Organization). All significant intercompany transactions have been eliminated. Basis of Accounting The Organization prepares its combined financial statements in accordance with generally accepted accounting principles promulgated in the United States of America (U.S. GAAP) for Not-for-Profit Organizations. The significant accounting and reporting policies used by the Organization are described subsequently to enhance the usefulness and understandability of the financial statements. Financial Statement Presentation The Organization is required to report information regarding its combined statements of financial position and activities according to three classes of net assets as follows: Unrestricted net assets - Net assets not subject to donor-imposed restrictions. Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may or will be met by action of the Organization and/ or the passage of time. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Organization. -9- Continued...
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Notes to Combined Financial Statements June 30, 2016 and 2015 (2) Summary of Significant Accounting Policies, Continued Cash and Cash Equivalents The Organization considers all highly liquid investments purchased with initial maturities of three months or less to be cash equivalents. Grants and Contracts Receivable and Allowance for Doubtful Accounts Grants and contracts receivable are periodically reviewed by management for collectability. Bad debts are provided for on the allowance method based on historical experience and management's evaluation of outstanding receivables. Accounts are written off when they are deemed uncollectible. Property and Equipment Property and equipment are recorded at cost or, if donated, at approximate fair value at the date of the gift. Improvements to property and plant in excess of $10,000, that materially improve the assets' useful lives, and purchases of equipment in excess of $5,000 are capitalized and recognized in the combined statements of financial position. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which range from three to forty years. When assets are disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss from such disposition is included in income. Revenue Recognition Contributions are recognized as revenues in the period received. Contributions of assets other than cash are recorded at their estimated fair value at the date of donation. Conditional promises to give are not included as revenue until the conditions on which they depend are substantially met. Revenue from exchange contracts with governmental and nongovernmental funding agencies is recognized when services have been provided or as costs are incurred based upon either units of service rendered or costs incurred, as appropriate to a specific contract. Deferred revenue includes amounts received for summer programs to be conducted in the following fiscal year. Expenses related to these programs have been recorded as prepaid expenses at year end. -10- Continued...
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Notes to Combined Financial Statements June 30, 2016 and 2015 (2) Summary of Significant Accounting Policies, Continued Contributed Services Individuals volunteer their time and perform a variety of tasks that assist the Organization with specific programs. An amount has not been recognized in the accompanying statements of activities for these volunteer efforts because they do not meet the recognition criteria under Financial Accounting Standards Board (F ASB) Accounting Standards Codification (ASC) 958-605-15, Revenue Recognition. Functional Allocation of Expenses The costs of providing the various programs and supporting services have been summarized on a functional basis in the accompanying combined statements of activities and changes in net assets. Accordingly, certain expenses have been allocated among the programs and supporting services as determined by management. Concentration of Credit Risk The Organization maintains cash balances at three financial institutions; these balances, at times, exceed federally insured limits. The Organization has not experienced any losses in such accounts and management does not believe it is exposed to any significant credit risk. Income Taxes CORA is a not-for-profit social services agency and the Foundation is a not-for-profit foundation. The Internal Revenue Service (IRS) has classified each organization as exempt from federal income taxes under Section 501( c)(3) of the Internal Revenue Code (IRC). Accounting principles generally accepted in the United States of America require management to evaluate tax positions taken and recognize a tax liability, if the Organization has taken an uncertain tax position that more likely than not would not be sustained upon examination by a government authority. Management has analyzed the tax positions taken by the Organization and has concluded that as of June 30, 2016 and 2015, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the combined financial statements. CORA and the Foundation file Federal Form 990. With few exceptions, CORA and the Foundation are no longer subject to examination by the IRS or state and local taxing authorities for years before 2013. -11- Continued...
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Notes to Combined Financial Statements June 30, 2016 and 2015 (2) Summary of Significant Accounting Policies, Continued Advertising Costs Advertising costs are expensed as incurred. Advertising costs for the years ended June 30, 2016 and 2015 were $9,265 and $11,032, respectively. Use of Estimates The preparation of the combined financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Subsequent Events The Organization has performed an evaluation of subsequent events through October 20, 2016, which is the date the combined financial statements were available to be issued. (3) Property and Equipment Property and equipment consist of the following at June 30: 2016 2015 Land $ 260,000 $ 260,000 Building 8,590,214 8,590,214 Equipment 376,373 362,948 Building improvements 193,186 193,186 9,419,773 9,406,348 Accumulated depreciation (2,743,766) (2,489,356) $ 6,676,007 $ 6,916,992 Depreciation expense for the years ended June 30, 2016 and 2015 was $254,410 and $250,076, respectively. -12-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Notes to Combined Financial Statements June 30, 2016 and 2015 (4) Line of Credit CORA has a demand line of credit with a maximum available balance of $2,500,000 from January 1 through August 31 and $3,500,000 from September 1 through December 31. The line of credit bears interest at the bank's prevailing prime rate (3.50% at June 30, 2016). The line of credit matures on December 31, 2016 and is collateralized by substantially all of the assets of CORA. The credit agreement requires that CORA maintain certain financial covenants to be tested annually. As of June 30, 2016, CORA is in compliance with the financial covenants. (5) Long-Term Debt 2016 2015 Mortgage note payable, due in monthly payments of $9,091, including interest at 4.77%; collateralized by a first mortgage on real estate and personal property; mortgage matures in October 2025. The interest rate will be adjusted January 2019 in accordance with the terms of the note. The note is subject to a declining prepayment fee ranging from 5% to 1 %. $ 805,492 $ 873,711 Mortgage note payable, due in monthly payments of $4,547; interest is calculated at a variable floating interest rate (2.275% at June 30, 2016), collateralized by a second mortgage on real estate and personal property; mortgage matures in October 2025. 453,997 497,830 Mortgage note payable, due in monthly payments of $5,004, including interest at 3.5%; collateralized by a third mortgage on real estate; mortgage matures in June 2021. The note is subject to a prepayment fee of 0.5 % of the amount prepaid. Current portion Long-term portion 269,956 1,529,445 (168,370) $ 1,361,075 319,527 1,691,068 (163,057) $ 1,528,011-13- Continued...
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Notes to Combined Financial Statements June 30, 2016 and 2015 (5) Long-Term Debt, Continued Future annual principal payments on long-term-debt as of June 30, 2016 are as follows: Year Ending June30 Amount 2017 $ 168,370 2018 174,749 2019 181,388 2020 188,300 2021 189,391 Thereafter 627,247 $ 1,529,445 (6) Temporarily Restricted Net Assets Temporarily restricted net assets as of June 30, 2016 and 2015 are available for the following purposes: Release July 1, from June 30, 2015 Contributions Restrictions 2016 Program activities $ $ 16,045 $ 9,196 $ 6,849 Emergency assistance 11,574 3,085 8,489 Construction of LaSalle day care 10,092 6,000 4,092 Resource center operation 27,509 27,509 Day care tuition assistance 4,138 4,138 Early years and intensive prevention 40,000 40,000 50,439 29,561 Child abuse prevention 3,125 3,125 Strategic planning 4,097 4,097 $ 100,535 $ 56,045 $ 103,492 $ 53,088 Release July 1, from June30, 2014 Contributions Restrictions 2015 Program activities $ 447 $ $ 447 $ Emergency assistance 8,845 5,000 2,271 11,574 Construction of LaSalle day care 10,092 10,092 Resource center operation 34,622 7,113 27,509 Day care tuition assistance 48,710 44,572 4,138 Early years and intensive prevention 40,000 40,000 Child abuse prevention 3,125 3,125 Strategic planning 4,097 4,097 $ 109,938 $ 45,000 $ 54,403 $ 100,535-14-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION Notes to Combined Financial Statements June 30, 2016 and 2015 (7) Contingencies The Organization receives funding from various pass-through entities. Until the financial information required by these entities is accepted, costs incurred for program services are subject to review and possible disallowance. In management's opinion, such disallowed costs, if any, would not be material to the Organization's combined financial statements. (8) Concentrations Revenues are derived primarily from contracts with state and local government agencies, as well as other not-for-profit conduits of governmental funding throughout the Philadelphia area. For the year ended June 30, 2016, unrestricted revenue from two contracts amounted to 58% of total revenue. As of the year ended June 30, 2016, amounts due from two agencies comprise 56% of the grants and contracts receivable. (9) Retirement Plan CORA's full-time employees are covered by a defined-contribution group annuity plan administered by NFP Retirement. Employer contributions are based upon a stated percentage of employees' eligible earnings, which ranges from 4 % to 7.2 % depending on the number of years of service of the employee. Employees may also make discretionary contributions. CORA's contributions to the plan were approximately $451,000 and $424,000 for the years ended June 30, 2016 and 2015,respectively. -15-
SUPPLEMENTARY INFORMATION
100 Witmer Road, Suite 350, Horsham, PA 19044-2369 215-441-4600 n fax: 215-672-8224 n www.kmco.com Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Board of Directors of CORA Services, Inc. and The CORA Services Foundation Philadelphia, Pennsylvania We have audited, in accordance with the auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the combined financial statements of CORA Services, Inc. and The CORA Services Foundation, which comprise the combined statement of financial position as of June 30, 2016, and the related combined statements of activities and changes in net assets, and cash flows for the year then ended, and the related notes to the combined financial statements, and have issued our report thereon dated October 20, 2016. Internal Control over Financial Reporting In planning and performing our audit of the combined financial statements, we considered CORA Services, Inc. and The CORA Services Foundation's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the combined financial statements, but not for the purpose of expressing an opinion on the effectiveness of CORA Services, Inc. and The CORA Services Foundation's internal control. Accordingly, we do not express an opinion on the effectiveness of CORA Services, Inc. and The CORA Services Foundation's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of CORA Services, Inc. and The CORA Services Foundation's combined financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Audit & Accounting Tax Strategies Business Advisory Technology Solutions Human Capital Resources Member of The Leading Edge Alliance
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether CORA Services, Inc. and The CORA Services Foundation's combined financial statements are free from material misstatement, we performed tests of their compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of combined financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of CORA Services, Inc. and The CORA Services Foundation's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering CORA Services, Inc. and The CORA Services Foundation's internal control and compliance. Accordingly, this report is not suitable for any other purpose. Horsham, Pennsylvania October 20, 2016-17-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION City of Philadelphia Department of Behavioral Health and Intellectual Disability Services Office of Addiction Services Contract Number: 13-20108 Schedule of Functional Expenditures by Program and Revenue by Funding Sources Year Ended June 30, 2016 Recovery Case SAP Management Assessment Expenditures by cost center: Total personnel services $ 133,647 $ 89,611 Total operating expenses 13,269 9,433 Total expenditures by cost center 146,916 99,044 Funding sources: CBH revenues 72,286 City of Philadelphia, Office of Addiction Services 71,081 99,044 Office of Addiction Services/ Behavioral Health Special Initiative/ Philadelphia Mental Health Care Corporation 4,263 Total funding sources 147,630 99,044 Excess expenditures over funding sources $ (714) $ Adolescent Case Management $ 185,083 53,425 $ 238,508 238,508 238,508-18-
Gambling Prevention $ 154,073 42,465 196,538 BHSI/ Teen Intervention Program $ 51,175 5,316 56,491 Total $ 613,589 123,908 737,497 196,538 72,286 605,171 196,538 65,413 65,413 69,676 747,133 $ $ (8,922) $ (9,636) -19-
Report of Revenue by Agency Name: CORA Services, Inc. Functional Program Address: 8540 Verree Road Philadelphia, PA 19111 City of Philadelphia Department of Human Services Year Ended Tune 30, 2016 DHS DHS All Total all Contract No. Contract No. Other Sources of Revenue Functions 15-20213-01 15-20412-01 Functions 71 State Government $ - $ - $ - $ - 72 - - - - 73 - - - - 74 Philadelphia DHS 1,520,233 816,952 703,281-75 Philadelphia DHS Community Block Grants - - - - 76 Philadelphia North City Congress 1,567 - - 1,567 77 Philadelphia Activities Fund - - - - 78 Philadelphia Department of Recreation - - - - 79 Community Behavioral Health 72,286 - - 72,286 80 Board of Education 8,178,305 - - 8,178,305 81 Office of Addiction Services 605,171 - - 605,171 82 MH/MR - - - - 83 Youth Activities - - - - 84 Public Health Management Corp 308,493 - - 308,493 85 Real Alternatives 25,055 - - 25,055 86 Investment Income 94 - - 94 87 - - - - 88 Rental Income 98,140 - - 98,140 89 Endowment Fund - - - - 90 Foundation Income - - - - 91 United Way 1,245 - - 1,245 92 Program Income - - - - 93 Client Fees 7,039,653 - - 7,039,653 94 Other 400,569 - - 400,569 95 Grand Total $ 18,250,811 $ 816,952 $ 703,281 $ 16,730,578 Accounting Method Used A_c_c_ru_a_l -20-
Report of Functional Expenditures Year Ended June 30, 2016 City of Philadelphia Department of Human Services Agency: CORA Services, Inc. DHS DHS Total all Contract No. Contract No. All Other Objects of Expense Functions 15-20213-01 15-20412-01 Functions Salaries and Wages 1 Direct Service and Program Support $ 10,825,684 $ 495,024 $ 426,771 $ 9,903,889 2 Management and General 695,614 35,211 30,837 629,566 3 Building Maintenance 376,503 11,722 10,036 354,745 4 Promotional and Fundraising 32,047 - - 32,047 5 Admin. Cost Center - - - - 6 F.I.C.A. 872,877 39,707 36,935 796,235 7 Unemployment 144,578 6,614 5,796 132,168 8 Workers' Compensation 49,330 2,386 2,130 44,814 9 Employee Benefits 1,889,930 108,677 80,140 1,701,113 10 Other - Life Insurance - - - - 11 Total Social Services 14,886,563 699,341 592,645 13,594,577 30 Total Salaries and Wages 14,886,563 699,341 592,645 13,594,577 Operating Expense and Administrative 31 Professional Fees and Contract Payments 1,323,413 11,693 11,048 1,300,672 32 Supplies 515,519 6,782 6,566 502,171 33 Telephone 107,386 2,749 5,548 99,089 34 Postage and Shipping 10,704 565 561 9,578 35 Local Transportation 65,128 11,780 5,295 48,053 36 Outside Printing 8,770 - - 8,770 37 Conferences, Conventions, Meetings 20,521 5 4 20,512 38 Subscriptions, Publications - - - - 39 Membership Dues - - - 40 A wards and Grants 8,500 - - 8,500 41 Equipment, Furniture and Motor Vehicles Rental 28,467 875 (591) 28,183 42 Equipment, Furniture and Motor Vehicles Depreciation 24,498 1,439-23,059 43 Equipment, Furniture - Maintenance and Repair 143,260 9,123 10,133 124,004 44 Other - Advertising 9,266 371 281 8,614 45 Other - Bad Debt Expense 43,222 - - 43,222 46 Total Social Services 2,308,654 45,382 38,845 2,224,427 49 Total Operating Expense and Administrative 2,308,654 45,382 38,845 2,224,427 Occupancy 50 Indirect shared Facility Expense - Including Rent 33,999 62,566 66,007 (94,574) 51 Building and Building Equipment Insurance 137,748 9,663 5,784 122,301 52 Building and Grounds Maintenance and Repairs 188,918-188,918 53 Utilities 103,247 - - 103,247 54 Amortization - - - - 55 Interest 103,488 - - 103,488 56 Depreciation 229,911 - - 229,911 57 Other - - - - 58 Total Social Services 797,311 72,229 71,791 653,291 62 Total Occupancy 797,311 72,229 71,791 653,291 Grand Total Expenses 17,992,528 816,952 703,281 16,472,295 76 Child Care and Social Services 17,992,528 816,952 703,281 16,472,295 81 Grand Total Expenses 17,992,528 816,952 703,281 16,472,295-21-
CORA SERVICES, INC. AND THE CORA SERVICES FOUNDATION City of Philadelphia Department of Human Services Report of Excess Revenue Year Ended June 30, 2016 Agency name: CORA Services, Inc. Address: 8540 Verree Road Philadelphia, PA 19111 Total DHS Revenue: Deduct: Expenditures for Phila DHS Services: Salaries and Wages Operating and Administration Occupancy Children 1 s Direct Expense Total DHS Expenditures: Excess Revenue/(Expense) $ $ DHS DHS Total DHS Contract No. Contract No. Services 15-20213 15-20412 1,520,233 $ 816,952 $ 703,281 1,291,986 699,341 592,645 84,227 45,382 38,845 144,020 72,229 71,791 - - - 1,520,233 $ 816,952 $ 703,281 - - - -22-
100 Witmer Road, Suite 350, Horsham, PA 19044-2369 215-441-4600 n fax: 215-672-8224 n www.kmco.com Independent Accountants' Report on Compliance with Specified Indirect Cost Allocation Requirements The Board of Directors of CORA Services, Inc. and The CORA Services Foundation Philadelphia, Pennsylvania We have examined CORA Services, Inc. and The CORA Services Foundation's compliance with allocating indirect costs reflected in the City of Philadelphia, Department of Human Services Report of Functional Expenditures as required by the Commonwealth of Pennsylvania, Department of Human Services, Section 3170.60 of the Chapter 3170 Regulations; and the "Indirect Cost Allocations" Section of the City of Philadelphia Subrecipient Audit Guide - Instructions For Completing The Report of Functional Expenditures (Section 2000, Exhibit B) during the year ended June 30, 2016. Management's Responsibility Management is responsible for CORA Services, Inc. and The CORA Services Foundation's compliance with those requirements. Accountants' Responsibility Our responsibility is to express an opinion on CORA Services, Inc. and The CORA Services Foundation's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about CORA Services, Inc. and The CORA Services Foundation's compliance with the aforementioned requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on CORA Services, Inc. and The CORA Services Foundation's compliance with specified requirements. Opinion In our opinion, CORA Services, Inc. and The CORA Services Foundation complied, in all material respects, with the aforementioned requirements for the year ended June 30, 2016. Audit & Accounting Tax Strategies Business Advisory Technology Solutions Human Capital Resources Member of The Leading Edge Alliance
This report is intended solely for the information and use of the Board of Directors, management and City of Philadelphia, Department of Human Services and is not intended to be, and should not be, used by anyone other than these specified parties. Horsham, Pennsylvania October 20, 2016-24-